Ladies and gentlemen, good day and welcome to the Sarda Energy & Minerals Limited Q3 and Nine Months FY 2026 Earnings Conference Call hosted by Adfactors PR. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing * then 0 on your touch-tone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Manasi Bodas from Adfactors PR. Thank you, and over to you, ma'am.
Good evening, everyone. Thank you for joining us today to discuss Q3 and nine months FY 2026 business performance of SEML. We have with us Mr. Pankaj Sarda, Managing Director, Mr. Manish Sarda, Deputy Managing Director, Mr. Padam Kumar Jain, Director and Chief Financial Officer, and Mr. Nilay Joshi, Executive Director. Before we proceed with this call, I would like to mention that some of the statements made in this call may be forward-looking in nature and may involve risks and uncertainties. The company undertakes no obligation to update any forward-looking statements to reflect developments that occur after the statement is made. Documents related to the company's financial performance, including the investor presentation, have been uploaded on the stock exchange and company's website.
I now hand over the conference call to Mr. Pankaj Sarda. Thank you, and over to you, sir.
Thank you, Mansi. Good evening, everyone. For the nine-month period ended December 2025, the company has delivered a robust operating performance, reflecting steady execution across our integrated Energy Plus Minerals platform. Our focus on scaling the energy business, strengthening integration across mining, and maintaining discipline in metals has continued to support stability and predictability across cycles. In line with this long-term strategy, the third quarter posted steady performance, barring certain planned and timing-related factors. The quarter was impacted by the annual maintenance shutdown of the IPP, the shutdown of one captive power unit for equipment replacement, and a period of subdued metal and energy prices. These were largely anticipated operational events, and our integrated model helped absorb the impact while maintaining stability across businesses. Operationally, production across key assets remained broadly stable.
Thermal power generation at IPP in Raigarh benefited from improved plant reliability and fuel availability, although plant maintenance affected output during the quarter. Hydropower generation followed normal seasonal patterns. For the nine-month period, hydropower generation increased by 28% year-on-year to 621 million units, supported by above-average monsoon conditions and the commissioning of the 24.9 MW Rehar Hydropower project. For the Rehar project, we have signed a 40-year power purchase agreement with Chhattisgarh State Power Distribution Company Limited. The tariff has been fixed at INR 7.42 per unit, providing long-term revenue visibility and further strengthening the quality of our energy portfolio. Approval to enhance the capacity of the Gare Palma IV/7 coal mine from 1.68 million tons to 1.8 million tons is at the final stage and is expected shortly. We remain confident of achieving the enhanced output within the current financial year.
Development of the Sahapur West high-grade coal mine is progressing as scheduled, with commissioning targeted before the end of the next financial year. Approval processes for the Gare Palma IV/5, Bartunga, and Senduri coal mines are ongoing. Within our power portfolio, captive solar power 50 MW commissioning of the 50 MW captive solar power project is expected in the first quarter of the next financial year. Work is progressing on schedule regarding 30 MW TG set replacement. Work is progressing on schedule, with commissioning expected by mid-FY 2027. Shutdown in December temporarily affected steel production at Raipur. We are also pursuing approvals for expansion of our existing 600 MW IPP thermal power project. As an update on the ongoing litigation matters regarding SKS Power Generation acquisition, the appeals filed by the unsuccessful resolution applicants have been heard by the Honorable Supreme Court, and the matter has been reserved for order.
Coming to the financial performance, consolidated revenue for Q3 FY 2026 stood at INR 1,360 crores, reflecting the impact of plant shutdowns and weaker price realizations. EBITDA increased to INR 395 crores compared to INR 368 crores year-on-year, driven largely by the energy segment. Consolidated PAT stood at INR 190 crores. For the nine-month period, PAT increased by 59% to INR 954 crores. Our balance sheet remains strong, with negligible net gearing and net debt to EBITDA well below 1x. Consolidated net debt as of 31 December 2025 was below INR 500 crores, significantly reduced from approximately INR 1,500 crores as of 31 March 2025. Liquidity remains robust. On a standalone level, the company remains cash positive.
With that overview, I now hand over to Mr. Manish Sarda to discuss the industry overview and outlook. Over to you, Mr. Manish.
Thank you, Pankaj, and good evening to everyone on the call. I will briefly touch upon the broader industry environment and the demand outlook across steel, power, and related commodities. During calendar year 2025, India stood out positively among global steel markets. Crude steel production in India grew by over 10%, even as China and several global markets recorded contraction. While China's steel production fell to a six-year low, exports increased by 7.5% to around 119 million tons, continuing to influence global trade flows and pricing dynamics. India's steel consumption reached approximately 160 million tons, supported by sustained infrastructure spending and steady manufacturing activity. The imposition of safeguard duties has meaningfully altered trade dynamics, turning India back into a net exporter after six consecutive quarters of net imports.
Steel prices, which had touched the multi-year lows earlier in the year, recoiled sharply towards the end of December and have strengthened by around 10%-15%, reflecting improving sentiment and tighter domestic supply conditions. From a policy perspective, the Union Budget's allocation of INR 20,000 crore toward carbon capture, utilization, and storage is a significant development. They expected to support the adoption of greener technologies across energy-intensive sectors such as steel and cement and reinforces the long-term policy commitment towards sustainability and green transition.
Turning to the power sector, demand during the quarter was largely flat on a year-on-year basis. Thermal plant utilization, which had softened since April, showed signs of improvement towards December. Power prices on the exchange moderated, with IEX average prices at around INR 3.33 per unit compared to INR 3.79 per unit last year.
I'll continue with that. There might be some line issue in the Manish Sarda ji's line. Nilay, can you hear?
Yeah, yeah. Are you audible?
Hello. Am I audible?
Yes, yes. You are audible.
Yeah. Coal index prices also declined modestly during the period, contributing to a relatively benign fuel cost environment. Am I audible?
Yeah, yeah. I can hear you clearly.
Okay. Looking ahead, infrastructure spending, ferro alloys export in Q3 went up from 23,256 metric tons to 33,272 metric tons year-on-year, registering a growth of 43% for a nine-month period. It remained near flat. Looking ahead, infrastructure spending, policy continuity and the ongoing expansion of India's manufacturing bases are expected to support economic activity and steel demand. Recent firmness in commodity and ferrous metal prices points to improving.
Recent firmness in commodity and ferrous metal prices points to improving fundamentals, while power prices have also shown signs of recovery since December. To add on the power side, we have secured 200 MW of medium-term and 100 MW of long-term offtake to our IPP, providing stability to cash flows. In addition, the signing of trade agreements with regions such as the E.U., the U.S., and other markets is expected to support exports and enhance overall economic activity over the medium term.
That concludes our overview of the industry environment and outlook. Thank you.
Yes, sir. Should we open the floor for Q&A?
Yes, please. Go ahead.
Okay. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Manav Gogia with Yes Securities Limited. Please go ahead.
Yeah, hi. Good evening, and thank you so much for the opportunity. Sir, first of all, I wanted to ask a bookkeeping question. Could you give me what was the captive CPP production and sales units for this particular quarter?
CPP? Pardon?
The Captive Power Plant that we have, what was the?
No, no. You can refer to the investor presentation that has been uploaded on the website. You will find the data.
Yes, we have the IPP data over there, but not the CPP one.
CPP? I mean, nothing very meaningful.
On the production side as well, because there was a plant shutdown, I believe.
328 million units, and sales was 12 million units during the quarter.
Okay. That is quite good. For our IPP, what was the average tariff that we got for this particular quarter?
Average tariff?
Yes.
That was somewhere in the range of INR 5.
INR 5. I mean, in the opening remarks, you mentioned we are seeing some improvements. So how is Q1 shaping up or Q4 shaping up?
Q4 will be better than this level.
Okay. So INR 5.5.
It was slightly lower than INR 5, near INR 5, not INR 5. Now, it will be slightly above what we expected, above INR 5.
Okay, okay. That is quite helpful. Sir, secondly, I just wanted to know about the captive coal mine expansions that we are doing right now, moving from 1.8 million to 3 million tons and then to 5.2 million . I think we had to apply for fresh ECs, right, if I'm not wrong? And where are we in the process of that right now?
Right. We are in the process.
Okay. So what timelines are we looking at for the 3 million-ton expansion, FY 2027 end, or?
No, it will take minimum 2 years because forest clearance also is there, apart from another.
Okay. So sort of a 18-month-24-month period for the final ECs to arrive and the product.
Minimum 20.
Got it, got it. Yeah, thank you. Sir, one question I also had. I think we usually go for the SHAKTI coal, right, when it comes to our.
Right.
Yeah. What would be the cost differential between the Shakti coal that we're using versus the captive coal from our Gare Palma mines?
So it is almost equivalent, I would say. In fact, our captive coal prices might be INR 0.10 higher per GCP.
But we can use our captive coal for other purposes, including commercial sales, because the market price of the coal for the usage other than the power plant are higher than the SHAKTI coal. So we have option to sell the captive coal in the market.
As well as it totally depends on the auction also that is happening in SHAKTI coal. So sometimes we get it at cheaper prices. Sometimes the prices are higher.
Okay, okay. Sure, sir. One last question. I wanted to know what's the company's take on now doubling the capacities at SKS Power? How are those stocks shaping up?
We have already signed an MOU with the state government, and we should get the MOU in hand maybe in another one month. Then we'll start all the environmental clearances process, etc.
Okay. But it's going to be sort of a story for three-four years down the line, right? I think all the approvals might take another 2.5-3 years. Would that be the right understanding?
Correct.
Sure, sure, sure. Yeah, that is quite helpful. I'll join back to you for more. Thank you so much.
Thank you. Ladies and gentlemen, if you wish to ask a question to the management, please press * and 1. The next question comes from the line of Rajesh Bhandari with Nakoda Engineers. Please go ahead.
Good afternoon, sir.
Good afternoon.
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Above 550.
Above 550. Yes, yes. [Foreign language]
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will create demand for the steel and power both. [Foreign language] will also improve the efficiency of the steel plant.
[Foreign language] carbon capturing exactly what we are supposed to do?
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Thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press * and 1. The next question comes from the line of Aman Goel, an individual investor. Please go ahead.
Namaskar, sir. Am I audible?
Yes.
Okay. My simple question was that, if you allow, that whatever revenue is, EBITDA is, PAT is, sequentially see or Y-o-Y [Foreign language] What are the reasons that [Foreign language]
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[Foreign language]So there are three effects. One is the pricing of the steel, which has gone down. Second is lower generation of hydro power, because of seasonal effect. And third, shutdown of the one unit of captive power plant, IPP for maintenance. And also, one captive power plant unit was also shutdown for replacement. [Foreign language]
So, considering this all, we assume that coming to third quarter also will be in the same line?
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Is there any improvement you see?
[Foreign language] you get the maximum price for the power sales. [Foreign language] things will improve.
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Yes.
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[Foreign language] Sir, dhanyavaad. This is from my side.
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Okay, sir .
Power prices also will be with the industrial activity improving. Power prices will also move up from here.
Okay, sir. Thank you. Dhanyavaad. This is from my side. [Foreign language]
Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press * and 1 to ask a question. The next question comes from the line of Rajesh Verma with Pragya Securities. Please go ahead.
Good evening, sir. Sir, my question was, like, given that there is healthy cash generation in the company, are you looking for some more inorganic expansion opportunities, and you will focus more on brown field expansion only for now?
We are looking for both inorganic as well as the brownfield. In the brownfield already whatever we have plants, and there are certainly a lot of brownfield. We are taking up a few of the greenfield coal mines and greenfield hydro power projects. So, these are the greenfield opportunities. In addition to that, we are looking for definitely the inorganic opportunities also.
Alright, sir. Sir, just a follow up question on that. Given that there are so many tailwind sectors like nuclear energy, critical mineral mining and battery storage, do you have plans to diversify in any of these sectors, sir?
We are open for the opportunities, and whenever all these mine blocks and comes, we do study them as well. So, if any opportunity comes knocking our door regarding these, we will have a, we will have a positive outlook towards these.
Sure, sir. Noted. All the best, sir. Thank you. No, that was my question.
Thank you .
Thank you. Ladies and gentlemen, if you wish to ask a question, please press * and 1. The next question comes from the line of Puja Rathore, an individual investor. Please go ahead.
Sir. I want to check with you. If we are on track to achieve the INR 2,000 crore EBITDA in FY 2026, what could be the guidance for FY 2027?
We are in the cyclical industry, so generally we don't give advance guidance. But what we foresee, it should be better from 2026, higher than 2026.
Okay, sir. Thank you for taking the question.
Thank you. A reminder to all participants that you may press * and 1 to ask a question. The next question comes from the line of Nupur Gandhi with Siddhi Technologies. Please go ahead.
Hello. Am I audible?
Yeah.
Yes, ma'am .
Sir, I wanted to ask you a couple of questions. First, being on the planned shutdown, so, sir, how long was it for, approximately?
So, it was around for 40-45 days.
Okay, both the plants?
No, no, no, no. The first one unit, that is 300 MW of our IPP unit, was in a shutdown for 45 days, for planned shutdown, for a yearly overhauling. And another 30 MW plant turbine was taken on a shutdown on 1 December. This was a Siltara captive power unit, and it is being replaced with a new turbine. And we will start the turbine by mid of June.
Mid of June?
Yes.
Okay. And, sir, any update on the Supreme Court hearing?
We already covered in our opening address. Hearing is closed and reserved for order.
Okay, sir. Thank you, thank you. These are my questions.
Thank you .
Thank you. Participants who wish to ask a question, may press * and 1. The next question comes from the line of Dewang Sanghavi with Abakkus. Please go ahead.
Good evening, sir, and thank you for the opportunity. My first question is regarding SKS power plant. We had a guidance of 400 crore units of generation, and we are slightly lower in Q3. So, are we on track to that particular number for the whole year?
Yes, yes. We are on track.
We are on track. And any guidance for next year for SKS generation?
Generation should be slightly higher from that level. We are.
Slightly higher from?
Yes, it should be slightly higher from that level.
420 crore , 430 crore units, is that a good number to take?
Maybe 410 crore , 420 crore in between somewhere, it should be.
Right, sir. Secondly, we said that the steel prices have started moving up. So, wanted to know on a quarter-on-quarter basis, I think point to point, we had said 10%-15% hike. So, what will the quarter three average, and what could be the quarter four in terms of numbers, how higher it should be?
The quarter three average has been given in our presentation.
Right, sir.
And we can say the current price realization, so from there, you can consider about 12%-15%, depending upon product to product.
Right. 12%-15% could be the blended hike from Q3 levels.
Yeah, yeah. Blended. Ultimately, variation in--
Yeah, sorry?
For example, and moving down. So, giving specific percentage, but yes, it should be in somewhere in the range of product to product, there are variations. Say, in case of alloy, it may be 10%. In case of billet and wire rod, it is in the range of 15%.
Right, sir. Right, sir. is case of ferro alloys in terms of pricing this quarter as compare to last quarter? That has increased?
Slight improvement, not material.
[Foreign language] Slight improvement of ferro alloys.
But yes, there is some improvement, but not.
Right, sir. And the CapEx guidance for this year and next year, how much you will spend in nine months? What is the Q4 we are going to spend, and what is the guidance for FY 2027?
We have spend more than INR 400 crore already in the nine months. And what we had given the guidance of INR 500 crore-INR 600 crore, we should be able to comfortably achieve somewhere in the range of INR 550 crore-INR 600 crore, approximately. That will be the capex, INR 600 crore for the FY 2026. And similar expenditure, except the inorganic opportunities. For the organic opportunities, what we have already committed, we shall be coming. Amount of CapEx.
Right, sir. Yes, sir. Thank you, sir. This will be helpful and all the best.
Thank you.
Thank you. Participants who wish to ask a question, may press * and 1. The next question comes from the line of Rajesh Verma with Pragya Securities. Please go ahead.
Good evening, sir. I just wanted to ask another question. When do you plan to buy, when do you plan to double the SKS plant capacity?
So, already as in one of the questions I have answered, so we have recently done an MOU with the state government. So, this MOU copy will get in a month or a two months time, and then we will start the process of environment clearance, and which will take another two years. So, and immediately we will then go for placing the orders.
Sure. Thank you so much.
Alright.
Thank you. Ladies and gentlemen, if you wish to ask a question to the management, please press star and 1. The next question comes from the line of Puja Rathore, an individual investor. Please go ahead.
Thank you, sir. I just had a follow up. You know, earlier energy was a big lever for your growth, and now you are saying that minerals is also going to add value. How will the segment composition and the revenue contribution change? Will power continue to be 60%-70%? Will it increase? Will it reduce? And mineral will take over? How will it turn out?
Power will remain in the present category slightly. It may be adding more value, because ultimately minerals will also get converted into the energy only. So, power will remain prominent contributor to our bottom line.
Sir, in your opening remark, you talked about how you move the ferroalloy capacity to domestic right now versus exports. Is that going to be the outlook for the rest of the year, and what's the differential in the realization, export versus domestic?
Manish?
Can you please repeat again? If I am able to hear you correctly, the question that you ask, that whether the domestic pricing or the export pricing was better?
Fair, alright, yes .
in the ferro alloys, right. So, on certain grades, like the 70-grade silico manganese that we produce, we get a better realization. And on certain grades, like 6014, the domestic market is far better compared to the export markets. And primarily, the pricing remains almost the same. It's only the payment cycles which get impacted in terms of exports, because in the export markets, you typically have around 21 days of payment cycles.
Is that going to be the trend, that you'll continue focusing on domestic as the demand grows?
We will be continuously focusing on domestic as well as export markets, because we have a very dedicated domestic market, and we have a very dedicated export market. We keep a tab on the pricing on a regular basis as to where we get our realizations, which are the best for the company. But there are also angles of what you call continuity of supplies, because on certain contracts, this cannot be opportunistic. The export markets have to be continuously fed.
No, fair enough. Of course, there are some long-term relationships.
Yeah, some long-term relationships, because it's very difficult to pinpoint a certain contract, because there are certain contracts which you have to maintain for continuity as well.
Understood. Thank you so much.
Thank you.
Thank you. A reminder to all participants that you may press * and 1 to ask a question. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Thanks to all the participants who have come on the call. To conclude, the quarter reflects steady execution against our strategic priorities, supported by a constructive pricing environment across both energy and metals. We have continued to make visible progress on our growth initiatives. Gare Palma IV/7 mine has received enhanced capacity in the final stage of receiving the enhanced capacity approval of 1.8 million tons. Our solar power plant is expected to commission operations in the next quarter, and the Sahapur West mine remains on the track for commissioning next year. In parallel, we continue to evaluate opportunities in the green power to further strengthen our future-ready portfolio. Our disciplined approach to deploying surplus cash into diversified long-term growth projects provides strong medium-term visibility and reinforces our commitment to sustainable value creation. Thank you for joining us today.
Should you have any questions, please feel free to reach out to us or to our Investor Relations team. Thank you.
Thank you. On behalf of Sarda Energy & Minerals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.